Straw into Gold

Rumpelstiltskin was a character in a German fairy tale who could spin straw into gold. His magical ability captures children’s imaginations — and adults’ too. Do you wish you could ensure that you would always be able to make money, even in the worst of economic times? Wouldn’t it be great to know that no matter what happens tomorrow, you could gather up some lemons and make an incredible batch of lemonade?

Anyone can work for money. Anyone can get a job and toil away for a paycheck. But wouldn’t it be nice to know how to find or even create money, if there were no jobs available? Do you want to learn how to create value where none existed before? It’s really not that hard. You only need two things to make money from nothing: creativity and scarcity. Everyone knows that creativity is an important ingredient to success, but some people do not realize that creativity is wasted without scarcity.

Creative people have been making money for ages. Artists, authors, architects, and composers have always created valuable goods and services right out of thin air. Imagine how good it must feel for a painter to sell a painting. Some artists I know are reluctant to accept money for their work, because it was so effortless for them. It can be hard to put a real financial value on streaks of paint on cloth.

But people have been doing it sinceĀ the dawn of commerce: assigning “fair” values to goods and services created by other people. In cases of original artwork, the fair value is bolstered by the scarcity of the piece. If there is nothing else in the world like it, it can be very valuable.

In the information age, creativity is not the problem. Scarcity is. There are many creative people in the world. Many of them create great work. Because of the internet, their work is available to legions of customers. In this situation, the value of creativity has been deflated, because it is no longer scarce.

Let me illustrate, using the example of a book. At an earlier time in history, a writer could write a book on a subject and sell it to people interested in that subject. Imagine an expert on archery who decides to put all this knowledge to use and sell a book about archery. With the proper marketing and good reviews, the happy author could sell many, many books to all the people who are also interested in archery.

Now imagine the same author at work today. He has written a very good book about archery, and now he offers to sell it to people who would like to learn about archery. Unfortunately, no matter how good the book is, information about archery is hardly scarce. Prospective customers canĀ find all they need to know for free on the internet. Google, Wikipedia, and countless other sites, blogs, and forums have devalued the author’s book, because his content is not scarce. He will still be able to sell books to people who want to own a book about archery and to some people who just like to own books, but the majority of people with a cursory interest in archery will not care to commit to buying a whole book about it.

In the past, people bought books for one of two reasons:

  • The subject, genre, or story interested them or
  • They like the author.

Now we can get free fiction and nonfiction on any subject in any genre. The market is flooded. How can a creative person continue creating value from nothing?

Luckily, the work of an individual author is finite and scarce. If the imaginary archery author can keep his wits about him, he may yet be able to profit from his knowledge of archery. There may be plenty of content about archery. Some of it might be cheap. Some of it might be free. But the author can still use creativity to create scarcity.

You can still sell your product, if your audience believes your version is special. People will always buy books by their favorite authors, even if other authors have similar books. People like to be loyal customers and raving fans. To spin straw into gold in the information age, you must not only deliver what your customer wants. You must convince your customer that you are better than the multitude of other (sometimes free) options available.

Now an author must earn fans and customers not only by creating great content, but by being likable, earning trust, building community, delivering consistent and relevant content, staying timely, and other tactics. Creativity is not dead, but creative people will soon be unable to earn a living by the old model.

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